Centralization Within a Corporate Group : Factors Influencing Effects and Outcomes

This thesis examines the impact of centralization on organizational performance and the work environment within a multinational industrial manufacturing group. The study investigates organizational changes at Company A (Företag A) and Company B (Företag B), which involve the implementation of common processes, shared data systems, and standardized working methods to improve coordination and synergy. The objective of the study is to understand how the centralization process is carried out, and its effects on both the organization’s results and employees’ work environment. The main research question is: What factors influence the results of centralization? Two additional questions explore what enables or obstructs the process from a management perspective, and how the work environment is affected from the employees’ perspective. The investigation uses a case study approach, combining interviews, observations, document analysis, and applies theories like Kotter's change management, institutional theory, and Antonovsky’s sense of coherence (SOC). Findings show that successful centralization requires clear communication, employee engagement, and a common vision. Challenges include lack of transparency, increased workload, and decoupling between formal structures and practical implementation. The study highlights the importance of trust, balancing legitimacy with efficiency, and promoting meaningful participation to achieve desired objectives.